Via Globe and Mail -
The One, a luxury condo development in Toronto co-owned by real-estate developer Sam Mizrahi and road paving magnate Jenny Coco, is in receivership after its senior lender asked an Ontario judge to put a third party in control of the project.
Under development since 2015, The One was designed as an 85-storey condominium, hotel and retail tower, and it was marketed as Canada’s tallest commercial condo building. However, the project is years behind schedule, owes $1.6-billion to its lenders, and has faced a growing number of lawsuits. Existing litigation includes a dispute between Mr. Mizrahi and Ms. Coco over the project.
In its receivership application, KEB Hana Bank, a commercial bank based in South Korea, said The One’s senior lenders are not prepared to advance additional funds without the appointment of an outside group to manage the project and oversee its development.
Late Wednesday, Justice Peter J. Osborne of the Ontario Superior Court approved the request, and Alvarez & Marsal Canada Inc. has now taken over.
KEB Hana Bank alleges Mr. Mizrahi and Ms. Coco have failed to repay The One’s lenders as laid out in the credit agreement, and added there have been “repeated defaults” over the course of the project.
China-East Resources Import & Export Co., or CERIECO, a state-owned Chinese enterprise and one the project’s first lenders, has
already sued Mr. Mizrahi and Ms. Coco, alleging default on its contractor’s loan that got The One’s development up and running.
KEB Hana Bank also expressed concerns about the project’s delays in its receivership request. “Construction of the entire project was expected to be completed by Dec. 31, 2022, but as of Oct. 4, 2023 concrete columns and walls have only been poured up to the 40th floor,” the lender wrote.
Technology giant Apple Inc.
has also sued Mr. Mizrahi because of these delays. Apple originally intended on putting its flagship Toronto store in The One’s ground floor, but in early 2022 the company sued, saying it was “profoundly disappointed” with Mizrahi because the building was nowhere near completion.
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Since that lawsuit was filed, there have been no public updates on Apple’s litigation. But in the receivership allegation KEB Hana Bank said it understands that The One recently lost its anchor retail tenant and that to date no other tenant has leased the space.
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